John L. Scott Real Estate
Sunday, September 23, 2018
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Financing

To help expedite the sale of your home and the subsequent move into your new home in a timely fashion, it’s important to discuss your options with your agent. Some examples are: 

● Seller-paid help with closing costs or loan fees
● Seller-paid buy-downs on interest rates
● Identify any applicable financing programs that would expand the market (ie: FHA, VA and “Rehab” loans)

Bridge Loan Program
A Bridge loan is a temporary financing arrangement provided by mortgage companies, which allows you to make the purchase of your new home before the sale of your current home is finalized. In essence, if you sign a purchase and sales agreement that is contingent upon the sale of your current home, a Bridge loan can protect your offer from being displaced by another buyer.

Capital Gains Tax
The Taxpayer Relief Act of 1997 excludes home owners from capital gains on the sale of a principal residence as long as certain guidelines are met. The first is that an individual must not exceed a gain of over $250,000 on the sale of at residence; the exclusion increases to $500,000 for joint filers. Any gains incurred above these limits will be taxed at the 20% capital gains rate. To qualify for exemption you must have owned and occupied the residence for a minimum of two of the last five years from the date of the sale. Another benefit of this exclusion is that you do not have to roll the gain of your last home into another, more expensive home, allowing home owners to freely choose the type of housing they want. For further information about capital gains tax, consu1t with a tax consultant.